Bills that would allow Appalachian Power and Dominion to seek approval to start charging customers for the costs of developing small modular nuclear reactors, or SMRs, moved forward in the Virginia House of Delegates and Senate on Tuesday.
HB 1491, sponsored by Del. Israel O’Quinn, R-Washington County, and SB 454, sponsored by Sen. David Marsden, D-Fairfax County, were approved on third reading, and the bodies will now swap legislation following crossover on Tuesday.
The bills would allow utilities to seek approval from the State Corporation Commission to begin charging customers for some costs. The bills do not specify an amount or a time frame for such charges.
SMRs have been a hot topic in the state since October 2022, when Gov. Glenn Youngkin announced he planned to deploy a commercial one in Southwest Virginia within 10 years, as part of his “all-of-the-above” energy plan.
SMRs are smaller, simpler versions of traditional nuclear reactors and can be built in a factory and shipped to a site, which saves time, reduces the risks and is cheaper than constructing a large reactor.
No SMRs have yet been built in the United States.
Both Dominion, the state’s largest utility, and Appalachian Power, which serves Southwest Virginia, have expressed an interest in SMRs. Dominion, which has two traditional nuclear power plants in Virginia, has included SMRs in its long-range plan, but no final decisions have been made.
[Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.]
Aaron Ruby, manager of media relations for Dominion, emphasized Tuesday that the bills would not allow the utilities to just begin charging customers.
“It would simply allow us to seek approval from the SCC to recover SMR development costs at a later time. The decision would be entirely up to the SCC and would only be approved if the SCC determines the costs are reasonable, prudent and in the best interest of consumers,” he said in an email.
Ruby noted that the legislation would help lay the groundwork for the necessary supply chain investments and incentivize businesses to locate or expand in Virginia. He added that it would promote stability in electric rates by allowing some cost recovery on the front end rather than backloading all the development costs late in the process.
There are some differences between the two bills.
O’Quinn said his House bill has significantly changed from its original version after input from environmental groups and discussion with the utilities.
The House bill passed Tuesday without discussion in a 74-24 vote. It would apply only to Appalachian Power and would allow the utility to only collect, with approval of the SCC, costs related to the early site permitting process, O’Quinn said. The bill states that the costs would include evaluation, design, engineering, environmental analysis and permitting, land options and early site permitting. It would not include the costs to obtain construction permits, the cost of licenses required by the Nuclear Regulatory Commission, or construction costs other than those necessary for early site permitting.
Larry Jackson with Appalachian Power said during a subcommittee hearing that the early site permitting process involves selecting a site and doing a “deep analysis” of whether it would be an appropriate location for a nuclear plant. He estimated the cost would be between $60 million and $100 million.
In the future, if the utility determines that an SMR is not feasible, the SCC could require the utility to sell the site and return the proceeds to customers. That provision was questioned by legislators and opponents who said a sale was likely to net less than what ratepayers would have paid into the project.
O’Quinn agreed to sunset the bill so it would expire on July 1, 2034.
“As we move into this phase in Virginia where there’s mandated retirement of certain coal and natural gas plants, when intermittent sources aren’t available, I do think that nuclear is the way that we have a zero carbon source that can provide the baseload power that we need to ensure that, pun intended, we won’t be left in the dark,” O’Quinn said.
The Senate bill was approved 20-16 with some discussion. It would apply to both Appalachian Power and Dominion and would include costs associated with the development of one or more SMRs at a single site, including costs of evaluation, design, engineering, federal approvals and licensing, environmental analysis and permitting, early site permitting and equipment procurement.
Under the bills, the SCC could impose a deadline for the utility to put an SMR into commercial operation or sell the site and return the money to ratepayers.
“One of the things I’m concerned about now … is that we need to get in line here,” Marsden said during the full Senate session Tuesday. “This takes a long time to get through the federal process. … Dominion estimates that we’re really not going to be able to get one in place until 2034. And what I’m concerned about is if we don’t get started on this process when the technology and the safety and the cost all start to line up, then there will be competition for who gets these SMRs from other states who are ahead of us in this.”
Both Sen. Travis Hackworth, R-Tazewell County, and Sen. Todd Pillion, R-Washington County, voted against the bill.
Hackworth said on the floor that he supports SMRs, but he could not approve legislation that would result in higher power bills in Southwest Virginia, which he said have increased.
“We have more constituent calls concerned about the rates that we are being charged in Southwest Virginia than any other constituent cause. … I cannot support a bill that would put more increased cost and burden upon our folks,” said the senator.
The bills drew both support and opposition as they made their way through committees. Opponents said the SMR technology is not proven and is risky, too expensive and unsafe, while others said they worry about the resulting waste.
Peter Anderson, with Appalachian Voices, said that the environmental group’s chief concern is that “ratepayers could spend a lot of money and have no electricity flowing to them at the end of this process.”
Several questioning the bills pointed to the termination in November of what would have been the first SMR power plant project in the U.S. NuScale Power Corp. — the only company whose SMR design has been certified by the Nuclear Regulatory Commission — and Utah Associated Municipal Power Systems announced that they’d agreed to end the 10-year project due to escalating costs.
Several proponents mentioned that aircraft carriers and submarines in Virginia have been safely powered by small nuclear reactors for decades.
Supporters of the measures also pointed to the nuclear expertise Virginia has in businesses including BWX Technologies, one of the world’s largest nuclear manufacturing and engineering companies, and Framatome, a nuclear reactor business, both in Lynchburg.
“We have the greatest minds in this industry in the commonwealth of Virginia,” Sen. Mark Peake, R-Lynchburg, said during the Senate session Tuesday. “Let’s put them to work.”
The bills had not been assigned to committees Tuesday night.